Wednesday, September 22, 2010

RE Health Care Reform: 13 Tax Changes on the Way - Kiplinger

Thomas M. Loarie posted this link in the Healthcare 2020 Discussion group on LinkedIn.

"As expected, the devil is in the details..."Health Care Reform: 13 Tax Changes on the Way - Kiplinger KIPLINGER.COM
This is an updated version of a March 23 story, incorporating the final changes signed into law by President Obama on March 30, 2010.

The LinkedIn discussion never developed any legs. I think it needs to so I am re-posting the link and my comments here.

The government has missed on so many points here, this is just the next step in killing off of small businesses. It seems that our elected officials don’t understand that small business drives the economic engine of our country. Let’s talk about a few of the specifics of the new law. For instance, the tax credit for small business with average salaries under 50k, but only for employees making under 25k; no help to small business - who's got average salaries under 50k? After they passed this law, my insurer asks the state to approve a 57-64% increase for next year. Next, why limit the amount for Flexible spending accounts? I guess they don’t have copays for their kids with diabetes or asthma on the federal plan? Why ban the use of HSA or FSA’s from OTC’s; with so many insurer’s not paying for products that have moved to OTC (allergies is an example category), they successfully shifted the burden for the meds to the consumer and now you can’t use pre-tax dollars to pay for them? I have a feeling many companies are going to be forced to choose the $2000 penalty vs paying for coverage for employees because it is it is going to cost far less then providing the benefits. Let’s summarize thus far. The new law pushes insurers into higher rates due to new mandates and small businesses to choose penalty over benefits (perhaps larger businesses will chose this route as well). This shifts the burdens to the employee/consumer who then is forced to buy insurance whether they need/want it or not. Finally, the hike in the 7.5% floor on itemized deductions to 10%, I assume means that you can’t take the deduction unless it exceeds this amount of your income. If you are employed with company provided benefits, didn’t you get a benefit from penny one? Didn’t the employer also have a lower rate because of buying group insurance? How does it make any sense not to allow all of the health care related costs now solely the responsibility of the employee/consumer to be deducted? If I am an individual purchasing insurance, I should not only be allowed the tax break for the whole thing, it should have nothing to do with my income and be indexed for the cost of living where I reside and work. Not only does it cost more for insurance in some areas than others, but it costs more to live as well. My fear is it will only get worse. Anyone else even a little bit concerned?